Standing in line inside the gas station, waiting to pay for some gas and a cold beverage (that I was going to wait until I got home to drink of course), always affords me the opportunity to see some interesting characters…
Yeah homeboy…let me get a pack of Kool filter kings, a strawberry swisher and $5 of gas.
(Peering out toward the pumps) Iz dat your vee-uckle right dere?
What?
Iz dat your veeuckle right dere?
I can’t understand you Bin Laden….WHAT??
Right dere! Right DERE!! (pointing frantically) Iz dat your carrr right dere?
Oh..yeah..that’s my car..the green Monte Carlo.
Uhkay..that’s pomp #3, my brudder.
What did you call me?
My brudder..you and me..(holding out his bare arm next to the customer’s)..same thing, we are brudders.
Nawww podna..I’m from Sunnyside..I ain’t in no Taliban or nothing like that there..(he smirked as he grabbed his cigarettes & cigar and walked outside to pump his gas)
Me eider…homeboy! Next in line please..
While the guy walked out to pump his gas, I found my interest piqued by the various assortments of vitamins that they had at the counter. I was reading the ingredients for a particular one that promoted ‘hammer strength’ when the guy stormed back into the store..
Hey mane! Something must be wrong with ya’ll pumps!!
Whot??! Whot do you mean?!
Cuz I just pumped $5 worth of gas quicker than you can ring up that cash register!! Ya’ll must be rigging up the pumps!!
No! No! NO! Our pomp is good..we have good pomp!
Well how come that $5 barely moved my gas needle past the E??!!
You pay 5 dollar..you get 5 dollar of gas! Now go before I call police!
You can call the police on me if you want to..I’ll call Colin Powell and tell him where your az is hiding out!!
You go..you go now!!
That’s the problem right there! All ya’ll ragheads come over here to America and start acting like you OWN this country!! Charging all the poor black folks high prices but letting them rich white folks just make it…yeah, you my ‘brudder’ alright…
I could feel the brother’s pain..gas prices had gotten pretty steep lately. But many people are very shortsighted and only see the end result of their woes and blame who ever is closest to them. There are a lot of factors that determine our local retail gas prices and the markup that gas stations add on to the price is just a small part of the price we’re actually paying. I’m sure most of us have noticed the recent surge in gasoline prices. While some of us (like the guy in the green Monte Carlo) vent our anger and frustration on the independent gas station attendants, we all need to look at the entire process that determines the price we pay at the pump. As the pictorial breakdown below illustrates, there are 4 major factors that influence the price per gallon of gasoline:
Crude Oil: Crude oil inventories have the single biggest effect on gas prices, and the United States depends heavily on foreign oil supplies. The single largest entity impacting the crude oil prices is the Organization of Petroleum Exporting Countries (OPEC), made up of a group of 11 countries (Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela). Together, these 11 nations account for 40 percent of the world's oil production and 77 percent of the world's oil reserves, according to the Energy Information Administration (EIA). When OPEC wants to raise the price of crude oil, it simply reduces production. This causes gasoline prices to jump because of the short supply, but also because of the possibility of future reductions. The mere threat of oil reductions can raise gas prices. World events such as the Venezuelan labor crisis and the U.S. invasion of Iraq greatly influence the speculation and production of crude oil.
Refining: Gasoline is not a natural resource that is pumped directly from the ground. Instead, gasoline is a refined product made from crude oil. Once the crude is pumped from the ground, it’s transported (via tanker, pipeline, truck) to oil refineries. These refineries process the crude oil into several products and byproducts such as gasoline, diesel, motor oil, etc. So these refining companies sell the finished grades of gasoline at a price that includes their cost for the crude oil + labor and operating costs + profit markup.
Distribution and Marketing: After the crude oil is transported to refineries, the gasoline is shipped from the refineries to distribution points and then to gas stations. The price of transporting the gasoline is then passed along to the consumer along with marketing costs for each oil company’s brand of gas. Included in this is the price markup that individual gas stations get on each gallon of gas. There’s no set standard for how much gas stations add on to the price. Some may add just a couple of cents, while others may add as much as a dime or more. The best thing to do is keep your eyes open as you drive around town and make price comparisons for future note. Some people will drive 20 miles out of their way to save 4 cents/gallon, go figure.
Taxes: Just like with any other business transaction in America, Uncle Sam is going to get his! Federal taxes are excised on each gallon of gas sold, as well as state, local and city taxes, which vary by region.
The regional differences in gas prices have a lot to do with various environmental standards of quality mandated by individual areas. California, for example, has its own reformulated gasoline rules that are stricter than the federally mandated clean-gas laws. This is why Californians pay a higher price for gas, because fuel has to be refined to a cleaner level and only certain refineries have the capability to achieve this higher standard. Or consider the recent gas crisis in Arizona that was spurred by a major distribution pipeline break feeding into Phoenix, once the supply is diminished, the prices increase. The standard unit of measure for crude oil is in barrels and one barrel is the equivalent to 42 gallons. A barrell of sweet crude oil is trading for about $32 today and dropping, but the price of gasoline has spiked higher due to several other reasons, such as the aforementioned pipeline breaks, the major power blackout in the NorthEast and Midwest 2 weeks ago that shut down several major refineries for up to 2 days and the peak summer vacation season that ends Labor Day weekend. In the end, gas prices are driven by demand, and everyone knows that America is addicted to oil. With our big SUV's and wide body cars we're a country of gas guzzling fiends. There are methods we can all practice to reduce this addiction, like walking, riding a bike, public transportation or even commuting with a friend in a green Monte Carlo. I'm sure if you'll put $5 on the gas, he'd be happy to let you ride.
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